IMF admits Ireland 'slippage' on targets for bailout
Delegation to hold a full review with the government in April
Published 04/03/2011 | 05:00
THE IMF yesterday admitted for the first time there has been some "slippage'' in Ireland hitting targets agreed as part of the €85bn bailout package.
The government had pledged to order the capitalisation of the main banks during February, but has since handed this over to the incoming administration.
At her regular press briefing yesterday IMF spokeswoman Caroline Atkinson said the Washington-based organisation would meet with the new government most likely in April.
She said because of the "slippage'' by Ireland, the organisation would probably combine two planned reviews into one.
She said the goals of the programme would not change, but discussions with the new government could happen on how to get to those goals. The IMF team would be a full "review mission'' she said.
Meanwhile, the man who designed the Irish bailout package, Ajai Chopra, yesterday appeared to criticise the EU's response to the sovereign debt crisis. Chopra, speaking at a conference in Washington said the euro debt crisis remained "extremely difficult", and officials needed to take aggressive steps to fix the problem.
"It's clear that markets remain concerned about the lack of a comprehensive strategy," said Chopra, deputy director of the IMF's European department. "Markets need to be reassured,'' he added.
Chopra said the steps necessary include quickly addressing the financial health of the region's financial institutions, and for officials to demonstrate the recently established financial stability fund can quickly raise resources and deploy them flexibly.
He said regulators across Europe needed to force banks to increase the capital levels and unviable banks needed to be wound down.
"Unviable business models need to be unwound," Chopra said. He also seemed to suggest the ECB should keep rates low.
"Our view is that the monetary policy in the euro zone can remain accommodative for now,'' Chopra said.
Meanwhile, European Union president Herman Van Rompuy said EU leaders will reach a deal on tackling the euro- area debt crisis this month, predicting the accord will be a "turning point" after a year of crisis-management.
"We will decide a global package for the euro zone and, at the end of March, we should be out of the woods," Van Rompuy said in the text of a speech yesterday in Brussels. "This month will be a turning point." The speech text was released yesterday by his office.
(Additional reporting by Reuters)